tv Studio 1.0 Bloomberg May 24, 2015 7:00am-7:31am EDT
♪ emily chang: by now, you know his story. the kid who started the social network in his harvard dorm room, grew it to 1.4 billion users, and became one of the wealthiest men in the world. but mark zuckerberg may not be done changing the world just yet. since taking facebook public, his bets have only gotten bigger. spending billions expanding his empire into photos, messaging, even virtual reality. internet.org may be his most audacious bet yet. featuring an epic battle with google, drones, lasers, and stratospheric hot air balloons,
to bring the internet to the farthest corners of the earth and win billions of new users in the process. our guest today on this special edition of "studio 1.0" is facebook founder and ceo mark zuckerberg. so first of all, you are a year and a half into this now. tell me your vision. and tell me what inspired you to do this. mark zuckerberg: when people are connected, we can just do some great things. we have the opportunity to get access to jobs, education, health, new kinds of communication. we bring people that we care about closer to us. it really makes a big difference. and the internet is how we connect to the modern world. but today, unfortunately, worldwide, only a little more than 1/3 of people have any access to the internet at all. it is around 2.7 billion people. and that means that 2/3 of people do not have any access to the internet. so that seems really off to me. you know, they are all of these studies that show that in developing countries, more than
20% of gdp growth is driven by the internet. there have been studies that show that, you know, if we connected 1 billion more people to the internet, there would be 100 million more jobs would be created. and more than that would be lifted out of poverty. so, you know, there is just this deep belief here at facebook that technology needs to serve everyone. connectivity cannot just be a privilege for people in the richest countries. we believe that connecting everyone in the world is one of the great challenges of our generation. and that is why we are really happy to be able to play, you know, whatever small part in that we can. emily: what do you think has been your single greatest achievement, and what has been the biggest setback? what have you had to compromise on? mark: we have been working on this for a few years so far, and what we have really learned is there are few major barriers to connectivity. and they are not necessarily what you would have thought, up front. for example, the first one is that a lot of people just do not have any access to a network. so it is a technical barrier. and they do not -- even if they had a phone and could pay for data, there would be no equivalent of a cell phone tower near them to access that. and, you know, that is what a lot of people think about when
they think about not having connectivity. and there are projects like satellites and drones and things that we are working on that can help create connectivity, technical solutions, in areas where there are not that today. and that is important, but it turns out that that is actually a pretty small part of the problem. only about 15% of people who are not connected are not connected because of a technical barrier. the next barrier is affordability. right? and a lot of the people who have access cannot afford to pay for it. so the solution to that is to make it more efficient, make it so the network of infrastructure that operators are using is more efficient, so the apps people use consume less data, and there is a lot of work that is going into that. you know, we made the facebook app on android, for example. i think it uses about, you
know, about five times less data than it did last year. so that directly goes towards being cheaper for people to use. and we have made a bunch of these tools open for other folks to use as well. but it turns out that the biggest hurdle actually is not either technical or affordability -- it is the social challenge where the majority of people are not connected actually are within range of a network and can afford it, but they actually do not know why they would want to use the internet. and it kind of makes sense if you think about it. if you grew up and you never had a computer, and you have never used the internet, and someone asked you, "do you want to buy a data plan?," your response, too, would probably be, "what's a data plan, and why would i want to use this?" and that ends up, i think, being the biggest challenge, and one where we can have the most value by giving people some free, basic services by working with operators and governments, and helping people understand what they can use the internet for to be an on -ramp for everyone. but we are working on all these things. emily: facebook is a for-profit company. why call it "dot org"? is this a non-profit? is this charity? mark: you know, if we were primarily focused on profits, the most reasonable thing for us to do would be to really just focus on the first billion
people who are using our products. i mean, the world is not set up equally. the first billion people who are using facebook have way more money than the rest of the world combined. so from a business perspective, it actually does not make a huge amount of sense for us to put the emphasis in this that we are right now. the reason why we are doing it is two things. one is mission, right, we are here to help connect the world. and we take that really seriously. and to some degree, you cannot really do that if 2/3 of the world does not even have access to the internet. so, you know, we just turned 10 as a company. and we decided that in our next 10 years, we want to take on some really big challenges in the world, like helping everyone get online. and that is just an important thing for us and, i think, for a lot of other internet companies and fulfilling this mission overall. now, over the long-term, i do think it could be good for our company as well. if you look at it on a 10-year, 20-year, 30-year time horizon. because a lot of these countries and economies will develop, and over time, they will be important. but most people who are running businesses do not make investments for 30 years down the line, in terms of products that they are going to be building. emily: so you said a year ago when you spoke with david kirkpatrick at mobile world congress, you could not
construct a short-term model by which this becomes profitable. mark: yeah. emily: do you have a better idea now? when will this become profitable? mark: no, i do not have a better idea. [laughs] i mean, the reality is just that if a lot of people cannot afford to pay for data access in some of these places, then they are probably are not big ad markets and it probably is not a place where it is going to be particularly profitable in the near term. in fact, we will probably lose a bunch of money just because supporting facebook as a service and storing the photos and content that people want to share costs money. we will probably not offset it by making much. emily: you said connectivity is a human right. mark: mm-hmm. emily: you want to do good things. mark: mm-hmm. emily: if that is the case, why not give access to the complete internet? why just a few specific apps? mark: so it comes down to the economics of how this works. it turns out that most of the internet is consumed by rich media, especially videos. whereas, if you look at things like text -- so text messages, services like search or wikipedia or basic financial or health information, that can actually be delivered for relatively cheaply. it can often consume less than
1% of the overall infrastructure. so if you are thinking about building something that operators are going to offer for free, it needs to be pretty cheap for them to do. and we have basically figured out a series of services that people can offer and that actually ends up being profitable for the operators. the model that we consider this to be most similar to is 911 in the u.s. so even if you have not paid for a phone plan, you can always dial 911, and if there is a crime or a health emergency or a fire, you get basic help. and we think that there should be an equivalent of this to the internet as well. where even if you have not paid for a data plan, you can always get access to basic health information or education or job tools or basic communication tools. and it will vary country by country. so for example, when we launched in zambia, there hiv is a really big issue, so one of the free services that the government and folks wanted to include were services so you can learn about hiv and learn about different aspects of maternal health. and in different places, there are going to be different tools
that are important to include in this, kind of, 911 for the internet. emily: we have spoken to top ad execs who want to advertise to developing markets. they are very excited about the potential to advertise to people through internet.org. mark: yeah. emily: how does that benefit users? mark: well, i am not sure it is a big part of the solution in the near term, to be honest. i mean, i think what we need to do is work out a model with operators and governments and local partners that is profitable for them, so that way they can continue growing the internet. so what we found out in some of these early countries that we have worked in -- indonesia, the philippines, zambia, now kenya -- is you offer a little bit of the internet for free, and more people start using data, more people access the internet and can use these tools, but also more people start paying for data. once they understand what they would use the internet for, then people understand why they would want to pay for data. and these operators end up making more money, and it ends up being more profitable. and then they can take that money and reinvest it to build that better internet
infrastructure for everyone in their country. so, that ends up being very important. and a lot of what we have focused on for the last couple of years is just how do you build a model that is sustainable for everyone and delivers free internet to people. and originally we had thought, you know, maybe working with other kinds of partners would be important. but at this point, we think we have a sustainable model that is working in multiple countries now. and there is a lot of momentum and a lot of countries that are coming online and operators are coming to us to roll out the internet.org model in a lot of more countries. so i expect to see a lot over the next year. emily: so does that mean no advertising? mark: i do not think it is necessary to subsidize and make this a cheap model. emily: for facebook, specifically. mark: well, i mean again, in a lot of these countries there is not a very big ad market yet. so, it is not that we won't do it eventually, but right now for our business, the main thing that we need to do is continue making -- we are focused a lot on the quality of the ads and business experience. doing that in the developed world -- in the u.s. and europe and asia and a lot of places there -- is actually going to be the biggest driver of our own profitability and revenue, not trying to make ad markets
out of countries that are just coming online. emily: now, once you get people connected, once you have the power to reach them, how do you use that power? mark: are you talking about us or people specifically? emily: i am talking about facebook. mark: well for us, it is really all about enabling people. we worked with airtel in zambia. they were our first partner to rollout the suite of free, basic services. then within weeks we starting hearing these pretty amazing stories coming in of people using the internet. right? so, an expectant mother using the internet for the first time to look up safety and health information for how to raise her child. a poultry farmer using facebook, setting up a page in order to sell multiple times more chickens than he had been able to before. a university student using the internet to -- using wikipedia to look up the information and save money on books that she needed for an exam. and it is pretty crazy. within weeks, these new experiences start to come back. and that is really what we are here to do.
emily chang: what kind of data are you gathering about these users, and how do you use that data? mark zuckerberg: i do not think it is anything different from how people use facebook normally. the biggest thing that we have had to do to make internet.org work is connect with the different operators in these different countries. so for example, airtel in zambia, to make it so that people have a very easy way to go buy data when they want to do more things. so for example, you might be browsing facebook and see a link to news, or you see some video that you want to watch. and you know that is rich media, so that cannot be covered for free. but we make it so if you tap on that, it is very easy to just
right inline-pay, and that is good for everyone. it makes it so people can discover why they would want to consume content on the internet. it makes it so that airtel and our partners can make more profits, so they can continue investing and building out a faster and broader internet for everyone. and it gets more people online. emily: google is working on project loon and google fiber. what do you think of google's approach to connecting the world? mark: well, the thing is connecting everyone is going to be something that no single company can do by themselves. so i am really glad that they and a lot of other companies are working on this. internet.org is a partnership between a number of different technology companies and nonprofits and governments. there are folks who are doing things that they are contributing to internet.org. there are companies that are doing things that are separate. that is going to be necessary, right? i mean, there is a lot of technology that is going to need to be developed in order to build -- in order to tackle all three of those major barriers that i talked about. you know, technical, making it so that everyone has a network near them. affordability, so that way the network is efficient. and social, making it so that people have the content that they need in order to want to get online and consume all this. so i am very positive on it.
emily: have you had any talks with google about potentially partnering with them? would you ever partner with google? mark: yeah, i mean our team is in contact with them frequently. and i talk to a number of folks over there. when we launched in zambia, google was actually one of the services that was in the internet.org suite. and that is valuable, because in addition to health services and education and jobs and different government services and communication tools, people need to be able to search and find information. and whether we work with google on that or others in all these other countries, i feel that is an important thing. and i would love to work with google, they are a great search product. emily: bill gates criticized project loon, saying, "when you are dying of malaria, i suppose you will look up and see that balloon, and i am not sure how it will help you." have you heard from bill, and how do you respond to that? mark: yeah. i mean, bill and i have had a few conversations about this and other things that we have worked on together.
and, you know, i think the reality is that people need a lot of things in order to have good lives. health is certainly extremely important. right? we have done a number of things at facebook to help improve global health and work in that area. i am excited to do more there, too. but the reality is that it is not an either/or. right? people need to be healthy and to have the internet as a backbone to connect them to the whole global economy. the internet creates jobs. it actually is one of the things that facilitates health. so for example, in the most recent ebola outbreak, i asked a bunch folks who were involved in containing the outbreak -- you know, "what can we do to help?" the number one thing that they said is -- "help us get connectivity, because we need to be able to wire up all these different ebola treatment units to make it so that we can coordinate the response and so that people know and can count the people who have come into contact with folks who have ebola." so it ends up being important. it is not an either/or.
and, you know, i am certainly not here saying that connectivity is more important than health -- i mean, that would be ridiculous. but i hope we can help out with all of these things over time. emily: now one of the things we have been finding, we have been getting some notes from zambia -- i believe it was something like 200,000 new facebook users through internet.org. but 300 people using everything else. so i wonder how much do people really care about the free, basic services as much as they care about facebook? mark: one of the reasons why it makes sense for facebook to do this is because it is one of the big services that people want to use. one of the main reasons why a lot of people get online in developing countries is so that they can connect with people. and, you know, messaging services like whatsapp and facebook messenger and social network services like facebook are some of the most important services that people want to use. so, to some degree, it is not that surprising, but i do think more people are using these other services as well. emily: and i know messenger is part of the suite in some places. will whatsapp be part of the internet.org suite as well? mark: it is going to be different on a country-by-country basis. right? so just like the u.s. has 911 that has certain things in it,
in different countries, most of them have an equivalent of 911 that have different things. so for some, it is mostly just about health and crime. some have more things in it than the u.s. does. internet.org is kind of going to be like that, too. in each country, the governments and local operators are going to need to figure out what services they want to include. emily: google has android. mark: mm-hmm. emily: how do you overcome not having the hardware? not having android? mark: our strategy is just to build things that people really want to use. right? and, facebook is the most-used app. whatsapp and messenger and instagram are some of the next most-used apps that are out and there. so, at some level i think that as long as we are building services that people really want to use and that help people's lives, then it is not as big of a deal. it is certainly a little bit stressful -- we feel like we can maybe help people out more or deliver our services a little bit better if we had more partnerships with the operating systems that we were using to build our stuff. but it is not something that i am that stressed about at this point. because there is just -- as long as we stay focused on building our own stuff, i feel that is the right thing for us to stay focused on, not
♪ emily chang: so drones and lasers -- you know you have a whole big lab now working on this. when will facebook drones and lasers be ready for launch? mark zuckerberg: well, we are going to be testing some in the near future. i would be probably mistaken if i gave you an exact date on this, but it is -- that is one of the big technical barriers. right? there are a lot of people who do not live within range of a network, and drones and satellites and laser communication is one way to do it. microwave communication is another. these are going to be some of the solutions for providing more cost-effective connectivity to people where there are no existing cell
phone towers or infrastructure like that. emily: facebook is going to be ramping up spending. how much of that is going to go to internet.org and these efforts in, you know, the nasa jet propulsion lab, and where you are working on all of this other cool technology? mark: we are definitely investing a bunch in this. emily: we were talking about china. your mandarin has gotten pretty good. what is the likelihood internet.org could help you get facebook back into china? mark: i do not know. i mean, that is not something that we are focused on right now with internet.org. i mean it is -- you know, right now, there are countries where they reach out to us and say, "connectivity is a national priority, and a lot of people in our country use facebook. and if there's a way to work together to do that --" so, i mean, for example, in malaysia, i was meeting with one of the leaders in the government there. and making it so that everyone
in their country is connected is one of their top priorities. similar in indonesia. india, i think, as well, there are lots of priority around making sure that everyone can get connected. so it makes sense for us to try to prioritize countries that are reaching out to us proactively for this. emily: how will you judge that this has been a success? and, you know, 10 years ago, your vision was to get 1 billion people on facebook, and people thought that was so audacious. so if that is not audacious, what is it? mark: the goal here is to make it so that a person can walk into a store in basically any developing country, and buy a phone, and get access to some free, basic internet services. and that is the primary goal for people around the world. and, once we have made it so that this system is working in every country, that will be -- that is step one. and step two is actually making people use it, which will be its own multi-year challenge. just because, the internet is one of the best ways to teach people about what services that are out there, and we have to figure out other things as well.
a secondary goal is to make it so that this is a profitable thing for the whole international operator community. because, i mean, that is how you make this sustainable. this can not be something that is just charity for these operators around the world. this will work if providing free, basic services actually ends up being a way for them to get more paying customers and more people online. and then they can spend more money to invest and build faster networks and reach more people. and the signs that we have from the early countries that we are in suggest that both of those are going to be true. and that is what i look the most forward to over the next 10 years. if we can make it so that free, basic services are available in 100 or more countries, and 1 billion or more people can get connected in these countries, then that is a huge win for all these people. they will have access to new information on jobs and health care and education and communication tools they just did not have before. emily: you said you hoped for more than 1 billion people by 2020, do you think you can get there? mark: we will see. [laughter]
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